Diversified Income

Nonprofits should receive money from as many different sources as possible. These sources include private donations, churches, other nonprofits, foundations, businesses, communities, fund raising events, and government agencies.

The more sources the better for a nonprofit since no source is a guaranteed income. However, it is not possible to work on all of these sources because each takes a certain amount of time and effort. Priority is needed.

Everything ends up being a choice of two methods. Getting a lot of money from a few sources or a little money from a lot of sources.

Getting a lot of money from a few sources means each request is generally long, complicated, and littered with traps. Competition is usually high with the funding organization wanting to trim out as many applications as possible using any excuse. Most of these sources are government agencies.

Using this method of few sources allows a nonprofit to focus more on these applications, giving them some upper level of chance. Yet, requesting a lot of money from a few places also means one denial can be catastrophic.

The other method of submitting to a lot of sources, means a lot more work. However, competition is usually lower and the submissions are not as cumbersome to complete.

This method requires being organized. There are more people to know and more time expended. However, one failure has a small impact. Also, getting a little from a lot means greater success since the source is not expending a large portion of their funds.

It all is a matter of personality. The first method is a greater risk with a higher payoff. The second method is less risk with a lower payoff.

Personally, I would always take the second method. It’s more work, but more assurance of success.